Summarize the movements in the exchange rate of the Australian dollar against the US dollar over the last 36 months. Using appropriate models, explain the various factors which have caused these movements. Considering current national andinternational economic conditions, critically discuss the impacts of the overall exchange rate outcome on the Australian economy and its implications for monetary and fiscal policies.
Helpful Tips:
A useful source of information is the Australian Financial Review. This newspaper publishes articles on the fluctuations in the exchange rate almost daily. A prime source of information is, of course, the Reserve Bank of Australia. In analyzing the impacts of the rising dollar on the Australian economy, you should be familiar with the challenges it is currently facing. As a starting point, read the article: "Cuts won't stave off a recession" (The Australian July 2, 2013). Although this article (attached) discusses mainly the recent RBA's interest rate decision, it provides a good snapshot of our current economic issues.
Show evidence (by quotations and/or references/in-text referencing) of wide reading. While the work is to be presented as an essay it is expected that appropriate use will be made of chosen diagrams and tables which enable you to concisely demonstrate your line of reasoning.
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